Chicago Mercantile Exchange (CME) live cattle futures rose to a six-week high on Friday on strong cash cattle markets due to a blizzard that trimmed weight gains and cut down on the number of cattle that were ready for market, analysts and traders said.

Spot CME cattle futures rose nearly three per cent for the week, the biggest weekly gain in nearly six months as buyers scrambled for beef supplies while cash cattle soared and carcass beef held firm.

"The cash market is really ripping. I hear $128 was paid in Texas, $128-$129 in Kansas so that’s $3 to $5 up," said Dennis Smith, broker for Archer Financial (all figures US$).

"I also heard carcass beef in Nebraska traded at $204 and that’s $6 up."

CME April cattle were up 0.1 cent per pound at 129.95 cents. June was up 0.15 cent at 125.1 cents/lb.

U.S. Plains feedlot cattle traded $3 to $5 per hundredweight (cwt) higher late on Thursday with the selling price up to $128/cwt and some Texas feedlots were holding out for about $130, feedlot sources said.

"There were only a little over 1,000 head traded. A normal weekly total would be 3,000 or more," a cash cattle source said.

The higher prices were attributed to tight supplies of market-ready cattle, higher beef prices, and to the blizzard that stressed cattle and kept them off the market, sources said.

"I’m surprised cattle futures aren’t stronger than this given the cash market strength. They obviously need cattle due to the disruptions from the storm," Smith said.

This week’s blizzard, which dumped up to 50 cm of wet snow accompanied by winds near 130 km/h, stressed cattle in the huge cattle feeding region of the U.S. High Plains, leading to big weight losses, cattle feeders and livestock experts said.

The U.S. Department of Agriculture on Friday reported choice wholesale beef carcasses up $1.33/cwt at $187.49 and up $4.24 or 2.3 per cent for the week. Select beef was down 51 cents/cwt at $185.25, up $4.96 or up 2.8 per cent for the week.

Feeder cattle were lower on profit-taking and on gains in Chicago Board of Trade corn futures which implied higher cattle feeding costs and potential diminished demand for young cattle to be placed on feed.

CME March feeder cattle were down 0.45 cent/lb. at 141.55 cents/lb. and April down 0.775 cent at 144.15 cents.

Spot feeder cattle were up 0.2 per cent for the week with gains tied to improving Plains pasture prospects following recent snow and rain over much of the drought-stricken U.S. Southwest grazing lands.

Cattle futures have been pressured by uncertainty ahead of the Friday deadline for U.S. governmental budget cuts. The cuts could slow beef production if federal meat inspectors are furloughed.

Slow export sales of U.S. beef last week and a cancellation of beef export orders by Japan hampered gains in cattle futures. The U.S. Department of Agriculture on Thursday reported a net 3,900 tonnes of U.S. beef sales last week, nearly a one-year low.

Lean hogs firm on oversold technicals

CME lean hog futures turned firm on oversold technicals after trending lower and floundering near a three-month low much of the week.

Signs the cash hog market also may be forming a bottom and turning up lent support to the hog futures market as well.

Spot hog futures ended the week down 0.6 per cent, the fourth consecutive weekly decline.

"Cash hogs are quiet but they appear to be firming up in the west and some pork product is being cleared out pretty well, so maybe the bottom is in or near," Smith said.

"I like the chart pattern all they way through the summer months, there appears to be a bottom forming," Smith said.

CME April lean hogs were up 0.125 cent/lb. at 81.125 cents; May was up 0.1 cent at 89.4 cents.

Cash hog markets were steady to 50 cents/cwt higher in Iowa and southern Minnesota on Friday with supplies tightening but packers were said to be well-bought.

Cash markets were steady elsewhere with Illinois cash sources saying a bottom had been reached and prices were expected to shift higher.

USDA on Friday reported wholesale hams $1-$2/cwt lower for 23- to 27-lb. weights and other weights were not tested. Bellies were not established and trading was very slow, with very light demand and mostly moderate offerings.

U.S. pork packer margins on Friday were a positive $7.80 versus a positive $10.50 on Thursday and a positive $2.95 a week ago, according to Hedgersedge.

The CME lean hog index for the two days ending Feb. 27 was at $79.60 and for the two days ending Feb. 26 it was at $80.40.

Concerns about the fate of U.S. pork exports to Russia and China as those countries remain cautious over the industry’s use of the additive ractopamine in some feed rations. Russia has banned U.S. meat imports, and China wants pork to be verified ractopamine-free by a third party from March 1.

Hog futures were nearing technical oversold levels and due for a correction. Based on continuous charts, lean hogs were trading near their lowest level in three months reaching a session low of $80.625 on Thursday before rebounding.

— Sam Nelson is a Reuters correspondent covering agricultural futures markets in Chicago. Additional reporting for Reuters by Alyce Hinton and Bob Burgdorfer in Chicago.